Committed to moving ahead

Newly appointed
Perpetual
head of equities Matt Williams and his deputy, Charlie Lanchester, have affirmed their commitment to the fund manager and mutual ambition to take it to the “next level" after former head of equities John Sevior stepped down.

In a highly anticipated move, Mr Williams and Mr Lanchester’s promotions were confirmed yesterday by the company after months of speculation around Mr Sevior’s future. Mr Sevior was with Perpetual for 17 years.

However, observers are still sceptical about Mr Williams’ long-term prospects at Perpetual given the close relationship he has with Mr Sevior.

Mr Lanchester, 40, said Mr Sevior had been a mentor and an advocate of his over the past 12 years, adding that he and Mr Williams were keen to grow the funds business.

“Matt and I see this opportunity to take this firm to the next level. We’re committed to that," he said.

Mr Lanchester said the pair had already “tweaked" how the fund manager operates, including how analysts and managers are remunerated, where performance attribution would be a focus.

“We have a strong team of analysts at the moment, as good as I’ve ever seen it at Perpetual," said Mr Lanchester. “It has always has been a real team effort. Although these star names have been rolled through in the past, I’ve been here long enough that there’s people contributing each year and that will continue."

Deutsche Bank estimated that Perpetual experienced about $1.2 billion in outflows from investors following news Mr Sevior would take a sabbatical beginning in June, and while there is risk of further outflows, the broker believes the bulk has already occurred.

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Mr Lanchester admitted the uncertainty of Mr Sevior’s future was not good, but Perpetual’s clients remained loyal.

“We’ve been through this several times before and we’ve got a track record of managing these changes quite well," he said, referencing the loss of Peter Morgan who was Mr Sevior’s predecessor.

Mr Sevior was understood to have a prickly relationship with Perpetual management but Mr Lanchester said there were no communication issues between the investment team and chief executive Chris Ryan’s team. “It’s still relatively early days and there’s some signs of moving the business forward in the right direction," he added.

The portfolios would be managed the same way with major equity positions retained, he said.

“There is no real change, it’s part of the way we do things."

That includes continuing a streak of shareholder activism, which became increasingly evident over the past year with the fund’s comments around Washington H Soul Pattinson and its cross-shareholding with Brickworks; the Orica and Dulux de-merger; and break-up of Fosters and Treasury Wine Estates.

“We take our major stakes in companies very seriously. If there’s something wrong, and something needs to be done, we take that seriously," he said. “Matt worked for John for 17 years. We all think of things in the same way."

Mr Williams declined to be interviewed. He has been at Perpetual for 18 years and is the portfolio manager of the Australian Share Fund and Pure Value Share Fund. He also manages 50 per cent of the Perpetual Industrial Share Fund.

Mr Lanchester is the lead portfolio manager of Perpetual’s Australian Sustainability Fund and also manages the other half of the Industrial Share Fund.

Mr Sevior plans to open a new funds management business next year, which could see him link up with boutique incubator Treasury Group or secure seed capital from his former employer.

Deutsche said the performance of the equity market remained the biggest near-term earnings driver for Perpetual regardless of any further outflows.